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Indian stocks outperform in markets after Modi win

May 16, 2014

HONG KONG (AP) — Indian stocks jumped Friday as preliminary results from national elections indicated the opposition had won a landslide victory. Other global markets were subdued at the end of a fairly volatile week.

Indian stocks have been rising since voting in the world’s most populous democracy got underway six weeks ago. Investors have been anticipating a victory for the Bharatiya Janata Party and its allies.

Narendra Modi, the party’s candidate for prime minister, has campaigned on a pledge to revive economic growth amid widespread dissatisfaction with the ruling Congress party after a decade in power.

The Sensex stock index in Mumbai surged 6.1 percent at one stage before paring gains to close 0.9 percent higher.

“The BJP victory is likely to herald a revival in India’s economic fortunes, with the potential to boost Indian GDP growth back over 8 percent by 2017,” said Rajiv Biswas, Asia Pacific Chief Economist at IHS Global Insight.

Elsewhere, the mood was far more subdued as the week closed out with a whimper following broad-based losses on Thursday in the wake of soft economic data out of Europe and the U.S.

In Europe, the FTSE 100 index of leading British shares closed 0.2 percent higher at 6,855.81 while Germany’s DAX fell 0.3 percent to 9,629.10. The CAC-40 in France ended 0.3 percent higher at 4,456.28.

In the U.S., the Dow Jones industrial average was flat at 16,450 while the broader S&P 500 index rose 0.1 percent to 1,872.

“The week is heading towards a quiet finish in the U.S., which was almost inevitable following the heavy selling of the preceding two days,” said Chris Beauchamp, market analyst at IG.

Earlier in Asia, Tokyo’s Nikkei 225 stock shed 1.4 percent to close at 14,096.59 while South Korea’s Kospi rose 0.2 percent to 2,013.44. Hong Kong’s Hang Seng lost 0.1 percent to 22,712.91.

The mood was similarly subdued in currency markets, with the euro down 0.1 percent at $1.3706 and the dollar flat at 101.50 yen.

Update hourly